The second-quarter earnings releases are coming in thick and fast with 208 S&P 500 members having already announced their results as of Jun 27, with earnings declining 4.7% in spite of a 0.4% rise in revenues from the same period last year. As for the beat ratios, 73.1% of the companies have come ahead of earnings estimates and 51.9% have surpassed revenue expectations.
The way second-quarter results are unfolding, it is quite evident that we are into another quarter of an earnings decline for the S&P 500 index. Earnings growth is projected to be in negative territory for the fifth straight quarter.
Ten out of the 16 sectors in the Zacks coverage universe are expected to witness an earnings decline. Overall, earnings are expected to be down 3.5% from the same period last year on a 0.4% decline in revenues.
However, among the outperformers, the Utility sector is expected to outpace all others this season. Utilities are expected to grow second-quarter earnings by 21.7% supported by a 5.2% top-line improvement. Read more details from our Earnings Outlook report.
Utilities, which have reported second-quarter earnings as of Jul 27, 2016, have clocked earnings growth of 12.9% on the back of 1.5% top-line growth.
As policy makers have decided to keep interest rates unchanged for the time being, the domestic focused, capital intensive utilities will continue to benefit from rock-bottom borrowing costs for some more time to come.
Here, let us focus on a few utilities reporting on Aug 1.
Alliant Energy Corporation LNT, a Zacks Rank#2 (Buy) stock, reported on par earnings in the previous quarter. Alliant Energy’s Earnings ESP which represents the difference between the Most Accurate estimate of 34 cents and the Zacks Consensus Estimate of 37 cents is -8.11% (read more: Alliant Energy Q2 Earnings: What Awaits the Stock?).
ALLIANT ENGY CP Price and EPS Surprise
ALLIANT ENGY CP Price and EPS Surprise | ALLIANT ENGY CP Quote
ONE Gas Inc. OGS, a Zacks Rank #3 (Hold) stock, operates as a regulated natural gas distribution utility company in the United States. The company delivered a positive earnings surprise of 3.39% in the previous quarter.
ONE Gas Inc. has an Earnings ESP of +16.13%. Our proven model shows that the company is likely to beat estimates this quarter. That is because the stock has both a positive Earnings ESP and a Zacks Rank #3.
ONE GAS INC Price and EPS Surprise
ONE GAS INC Price and EPS Surprise | ONE GAS INC Quote
UGI Corporation UGI, a Zacks Rank #3 stock, supplies, stores, and markets energy products and related services to its global and U.S.-based customers. The company reported on par earnings in the previous quarter.
UGI Corporation has an Earnings ESP of +50.0%, which when combined with a Zacks Rank #3, makes a beat likely this quarter.